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US Facebook Ad CTR Falls 8% in Q1; Cost per Fan Up 37%

April 17, 2012 - by MarketingCharts staff

Facebook ad engagement rates in the top 5 markets measured by TBG Digital (Canada, France, Germany, the UK, and the US) fell by an average of 6% quarter-over-quarter in Q1, finds TBG in an April 2012 report. This comes after an 18% increase from Q1 to Q4 2011, and according to TBG Digital insight, could be due to the increase in number of ads per page, sometimes showing up to 7 at a time. The US saw an average click-through rate (CTR) decline of 8%, while France experienced a bigger drop of 13%.

CPM Up Big Y-O-Y

Data from TBG Digital’s “Global Facebook Advertising Report Q1 2012” indicates that average cost per thousand impressions (CPM) across the 5 major markets has jumped 41% since Q1 2011, and is also up 15% quarter-over-quarter. The US and the UK both saw double-digit increases in CPM this quarter, at 11% and 13%, respectively.

CPCs Rise 23% in One Quarter

Cost per click (CPC) has increased by an average of 23% in the past quarter, with France experiencing the biggest increase (35%), followed by the US (20%). On a year-over-year basis, US CPCs have now risen 34%. TBG Digital suggests that unbalanced supply and demand could be contributing to the higher cost of advertising.

Given the increased CPCs and decreased CTRs, the average cost per fan across the major markets jumped 43% quarter-over-quarter, with the UK seeing the largest growth, of 77%. The average cost per fan in the US rose 37% over the quarter.

Retail Captures Greater Share of Impressions

Looking at impressions by sector, the report finds that the top 5 sectors accounted for 78% of all impressions in Q1, up from 68% in Q4 (see link above). Retail shot to the lead at 23% of the total volume, up 77% from 13% in Q4. Food and drink was next at 19% share, followed by finance (14%), entertainment (11%), and games (11%).

The finance sector saw the most expensive advertising costs, with CPCs more 3.5 times more expensive than the food and drink sector. TBG attributes this discrepancy to the finance sector sending 91% of its traffic out of the Facebook environment, compared to the food and drink sector, which only sent out 4%, pointing out that Facebook rewards advertisers for staying within the Facebook environment by offering them reduced CPCs of up to 45%.

Other Findings:

The news sector saw an impressive 196% rise in CTR quarter-over-quarter, owing to the success of Facebook social readers.

The entertainment sector saw the best CTR for the quarter, displacing food and drink, which led all sectors in Q4 2011. The entertainment sector’s CTR in Q1 was almost 3 times higher that of the finance sector, which occupied the bottom spot. According to an April 2012 report from Experian Marketing Services, in 2011, Facebook advertising performance was best for consumer goods and retail industry campaigns, with conversion rates of 58% and 49% respectively, with the entertainment industry at a lower 38%.

About the Data: TBG Digital’s figures are based on 268 billion impressions served in the US, UK, Canada, France, and Germany throughout 2011 and 2012. Sector analysis figures are based on 144.2 billion impressions served through Q4 2011 and Q1 2012. CTR and CPC values are considered confidential and have been removed from the report.